J Reyes Heroles Doc Slides Houston 10 Feb 09

PemexPemex’’ss ReformReformandand Investment Projects Investment Projects

20092009--20122012

February 10, 2009

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• This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the National Banking and Securities Commission (CNBV) and the U.S. Securities and Exchange Commission (SEC), in our annual report, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties.

• We may include forward-looking statements that address, among other things, our:

− drilling and exploration activities;

− import and export activities;

− projected and targeted capital expenditures and other costs, commitments and revenues; and liquidity, etc.

• Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:

− changes in international crude oil and natural gas prices;

− effects on us from competition;

− limitations on our access to sources of financing on competitive terms;

− significant economic or political developments in Mexico;

− developments affecting the energy sector; and

− changes in our regulatory environment.

• Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise.

• These risks and uncertainties are more fully detailed in PEMEX’s most recent PEMEX prospectus filed with the CNBV and available through the Mexican Stock Exchange (www.bmv.com.mx) and the Form 20-F filing, as amended, with the SEC (www.sec.gov). These factors could cause actual results to differ materially from those contained in any forward-looking statement.

FORWARD-LOOKING STATEMENT

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• The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, “File No. 0-99”available from us at www.pemex.com or Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City 11311 or at (52 55) 1944 9700. You can also obtain this Form from the SEC by calling 1-800-SEC-0330.

• EBITDA, free cash-flow and discretionary cash-flow are non-GAAP measures.

CAUTIONARY NOTE

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INDEX

1. Pemex Reform

a. Strengthening of operations

b. Planning & Control

c. Policy & Regulation

2. Procurement and EPCs

3. Investment program: 2009-2012

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Pemex Reform: Introduction

As a result of President Calderon’s initiative, an ample legal reform was passed by Congress

Pemex is the main beneficiary of the reform

Not everything was achieved, but it’s an important first step, covering three main aspects:

Strengtheningof Operations

Planning &

Control

Policy&

Regulation

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I. Strengthening of Pemex’s operations Strengtheningof Operations

Planning &

Control

Policy&

Regulation

HIGHLIGHTSa) Management

Corporate Governance

Pemex’s Board is strengthened, with new functions and responsibilities

Integration

Specialized Board: four independent, professional members join the Board (approved by the Senate)

New Rules

Professional Board members will be incorporated into decision-making process

A wholly new law, specifically for Pemex, which regulates not only organization and operations, but also procurement, construction, budgeting, debt and

administrative responsibilities

Petróleos Mexicanos Law

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Committees

OrganizationMore flexibility to decide on the optimal organization for the company

Business unitsThe General Director may propose to the Board the creation of business units to carry out productive activities

Subsidiaries and non-state-owned companiesThe General Director may propose the creation of subsidiaries with private participation for activities not reserved to the Mexican State

1) Audit and performance evaluation2) Strategy and investments3) Compensations4) Purchases, leasing, construction & services procurement5) Environment and sustainable development6) Transparency and accountability7) Technological research and development

Seven specialized committees are created to enhance the Board’s

functions


Planning &

Control

Policy&

Regulation

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b) Operation and contractual regime

Specific contractual regime

Tailored to Pemex’s productive activities

Specific procedures

New requirements will facilitate awarding contracts, in modalities more adequate for the oil & gas industry

Special procurement and bidding procedures

New specific rules for Pemex projects are established

Direct awards (no bidding necessary)

Bidding in a restricted group

o For cases related to technological innovation, as well as engineering, research, training and studies


Planning &

Control

Policy&

Regulation

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Special contractual modalitiesNew contractual modalities, in addition to those considered in the Public Works Law:

Paymento New modality, based on pre-determined formulas or schemeso Full certainty on compensation methods and quantities

Contract updateso Revisions to multi-annual contracts due to technological advances, changes

in market prices and factors contributing to improving the project’s efficiency

Incentives and penalizationso May be established based on positive or negative environmental impact, or

non-compliance with scheduling or quality indicators

Variable compensationo May be awarded due to faster project execution, the appropriation of (or

benefit from) new technologies by Pemex, or other circumstances which increase Pemex’s profit and improve the project’s performance


Planning &

Control

Policy&

Regulation

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Schemes to support suppliers and contractors

Pemex will design a program which will include a diagnosis, specific objectives and quantitative goals to gradually achieve a national content of at least 25%

An annual procurement fund at NAFIN (national development bank) of 5 billion pesos in 2009 and 2.5 billion in 2010, to promote the development of Pemex’s suppliers


Planning &

Control

Policy&

Regulation

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c) Fiscal and financial

Specific budgetary regime

More autonomy for budgetary planning and execution

Financial balance goals

Pemex will propose every year to the finance ministry and Congress a five-year financial program, as part of its strategic business plan

Budgetary modifications

The Pemex Board will approve changes to the budget during the course of the year (subject to the “financial balance” goals)

Autonomy in deciding budget allocation for operation or investment

Excess income

Pemex will be able to use gradually a larger proportion of its excess income (above its income estimate)

From 35% in the 1st year to 100% in the 7th year, subject to meeting several specific goals, to be detailed in its business plan


Planning &

Control

Policy&

Regulation

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Budget execution calendar

Pemex will be able to execute its budget as defined by the Board, without needing the approval of the finance ministry

Budgetary execution is made independent from the public sector’s financial situation

Investment project registration

The Board will authorize the budget and use of resources for investment projects

Various requirements for registering projects within the finance ministry are eliminated or simplified

Transition period

Seven years for budgetary autonomy, subject to meeting business plan goals

Transfer prices

Annual study performed by an independent expert in July. Will be published.


Planning &

Control

Policy&

Regulation

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Specific regime for debt

PIDIREGAS

PIDIREGAS financing is eliminated and

substituted by budgetary resources

Pemex investment expense will no

longer be part of public sector

financial balance (more flexible

investment ceiling, tied to Pemex’s

resource availability)

DEBT ISSUANCE

Pemex will be able to issue debt

according to the company’s priorities and consistent with the public sector’s financing program

Pemex will be able to tap local and foreign financial markets without specific approval from the finance

ministry

STABILIZATION FUND

Pemex may use the resources

accumulated until 2008 in the

Stabilization Fund for Investment in

Infrastructure (12 billion pesos). This will enable startup for the construction

of new refining capacity, among other projects

CITIZEN BONDS

Credit titles that do not award property

or control rights

Their yield will reflect Pemex’sfinancial results

after taxes

Will boost transparency and accountability in

Pemex’s operations and finances


Planning &

Control

Policy&

Regulation

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New fiscal modalities for strategic projects:

1. Rate applicable for 2009

Acknowledges the higher complexity and cost of new fields

Chicontepec

71.5% rate and cost-deduction cap of USD $11/bl, compared to

74.5%1 and USD $6.5/bl in general regime

Deep waters

Rate range of 60%-71.5% (depending on oil

price level) and cost-deduction cap of USD

$16/b

Abandoned fields

Minimum additional production requirement is eliminated to grant more favorable fiscal regime


Planning &

Control

Policy&

Regulation

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Business plan (five-year projection)Five-year financial-balance goal scenario

II. Planning and controlStrengtheningof Operations

Planning &

Control

Policy&

Regulation

Planning

Control

Pemex will be subject to new and additional control, transparency and accountability mechanisms

Board Audit and Performance Evaluation committee A corporate commissioner to support the Board in looking out for the interests of citizen bond holders

Reports

Reports specified by law: from the General Director to the Board; from the corporatecommissioner to bond holders

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Pemex will be subject to the energy policy defined by the ministry, in terms of reserve replacement and production platform

Pemex will obtain a formal opinion (‘dictamen’) for the technical aspects of its exploration and exploitation projects from this Commission, and it will subject itself to the technical rules established by it

New authority in regulating prices for first-hand sales, pipeline transportation and storage for fuel-oil and basic petrochemicals

Will establish the National Energy Strategy, with a 15 year horizon, which will be approved by Congress

III. Policy and regulationStrengtheningof Operations

Planning &

Control

Policy&

Regulation

SENER

National Hydrocarbon Commission

National Energy Council

Energy Regulatory Commission

(CRE)

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1. Pemex Reform






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Reform Timeline

Executive, SHCPArt. 14 provisional Pemex Law

(90 days after the Law is signed)

Fund to promote the development of Pemex suppliers by NAFIN

FIRST MONTHFebruary

General Director, BA

Art. 31 fract. III Pemex Law

(Annual)

Annual operational and financial program

PEMEXArt. 49 fract. I Pemex LawFive-year financial-balance goal scenario

PEMEX and subsidiaries

Art. 13 provisional Pemex Law

(Annual)

Publication of a Procurement plan for small and medium companies

PEMEX and subsidiaries

Art. 50, and 13 provisional Pemex Law

(180 days after the Law has been signed)

Strategy to support Mexican and foreign suppliers and contractors

PEMEX and BAArt. 19 fract. III Pemex Law

(Yearly basis with a five-year projection)

Business PlanFOURTH MONTHMay

RESPONSIBLELEGAL FOUNDINGACTIONMONTH

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Director GeneralArt. 13 provisional, Pemex Law

(Every six months)

A report on the progress of the quantitative goals set by the strategy to promote Mexican suppliers and contractors

ELEVENTH MONTH

December

RESPONSIBLELEGAL FOUNDINGACTIONMONTH

Reform Timeline (cont.)

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Pemex Law, Art. 53Oil industry catalogue of unit prices for procurement and contracting

Pemex Law, Art. 19 Fract. IV-j; and Art. 53

Special contractual regime:

Procurement and contracting strategies and procedures

Pemex Law, Art. 53 fract. VIMechanisms for the determination of product prices

Pemex’s Board committee for purchases, leasing and procurement of services

Pemex Law, Art. 60 y 61New contractual models for construction and procurement of services for substantial activities

RESPONSIBLELEGAL FOUNDINGSPECIAL CONTRACTUAL REGIME

Special procurement conditions

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1. Pemex Reform






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Maintain crude production platform within 2.7-2.8 mmbd, and seek new opportunities to increase production to 3.0 mmbd, by 2015Maintain natural gas production above 6.0 bcfdIncrease reserve-replacement ratios to at least 100% towards 2012Re-establish reserve/production ratio to 10 years (after 2012)Reduce gasoline imports, by investing in conversion of residuals at existing refineries, as well as in additional refining capacityClose maintenance gaps to improve security and facilities’ integrityReduce environmental liabilities Reduce project-execution gaps

The investment strategy includes initiatives and projects in all company areas, with the objective of meeting the following medium and long-term goals:

Investment Strategy: Main Goals

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Petrochemicals3.7%

Gas & Basic Petrochemicals2.0%

E&P77.3%

2009 2009-2012

Exploration & Production 16,899 61,151

Refining 1,920 13,116

Gas & Basic Petrochemicals 353 1,609

Petrochemicals 208 2,929

Corporate 64 304

TOTAL 19,444 79,110

USD Million

Source: PEF 2009; exchange rate: 11.7 pesos/dollar

Refining16.6%

Does not include third-party projects (private pipelines, co-generation)

Corporate0.4%

Investment Portfolio: 2009-2012

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E&P: MAIN INVESTMENT PROJECTS 2009-2012

12,233Class IV: +35/-20%

2,562• Incorporate new reserves and re-classify existing reserves in order to reach a reserve/production ratio of 10 yearsExploration

PROJECT GOAL / REACH 2009 2009-2012

Chicontepec

• Contribute in meeting E&P goals by accelerating the recovery of oil and gas

• 2009 Activities: Finishing 1,063 wells, 501 major repairs, 274 minor repairs

2,314 11,149 Class III: +25/-15%

Cantarell

• Heavy crude and gas production through pressure maintenance, implementing an enhanced oil recovery system and optimizing production systems

• 2009 Activities: Finishing 14 wells, 51 major repairs, 8 minor repairs

2,176 5,559Class III: +25/-15%

Ku-Maloob-Zaap

• Produce oil and gas by drilling wells and implementing a pressure-maintenance system in producing fields

• 2009 Activities: Finishing 15 wells, 3 major repairs, 11 minor repairs

1,565 5,723Class III: +25/-15%

TOTAL 8,617 34,664

* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar

Investment(mmusd)

Investment is focused on maintaining production platform and increasing reserve-replacement ratio

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537Class I: +10/-5%

537• Increase production of value-added fuels

• Build and integrate 9 process plants; auxiliary services

MINATITLÁNRECONFIGURATION

2,209Class V: +50/-30%

279• Increase heavy crude process and production of value-added

dstillates; reduce fuel-oil production

• Includes construction of 8 new plants

SALAMANCARECONFIGURATION


CLEAN FUELS –GASOLINE

• Meet Mexican environmental gasoline standards

• Includes 8 post-treatment plants, 2 complementary plants, auxiliary services and 2 storage tanks

250 1,977 Class III: +25/-15%

CLEAN FUELS -DIESEL

• Meet the national sulphur content requirements

• Construction of 5 new plants; 4 storage tanks; modernization of 18 process plants and 21 complementary plants

76 2,601Class V: +50/-30%

MÉXICO CITY SUPPLY

• Guarantee fuels supply to Mexico City area by increasing pipeline capacity and storage at Tuxpan terminal

• New pipeline (113 km) and 5 storage tanks (100 mb each)140 257

Class IV: +35/-20%


REFINING: MAIN INVESTMENT PROJECTS 2009-2012 (1/2)

Investment is focused on satisfying national fuels demand and meeting federal environmental requirements

Investment(mmusd)

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60Class I: +10/-5%

36• Replace 1,105 Pemex trucks (529 in 2009-10)TRUCK TRANSPORT REPLACEMENT


NEW REFINING CAPACITY

• Increase distillate supply, reducing imports and enhancingnational energy security

• Build a new refinery to process heavy crude (300 mbd)66 8,160

Class V: +50/-30%

NEW PIPELINES• Increase transport capacity and optimize existing network

• Build Madero – San Luis Potosí (394 km) and Manzanillo -Guadalajara (314 km) pipelines.

- 730Class V: +50/-30%

TERMINAL CAPACITY

• Increase storage capacity and eliminate risks to population

• Re-locate 2 terminals (Tapachula, Reynosa) and build 2 newterminals (Caribbean, Mexico City)

4 99Class V: +50/-30%

TOTAL 1,389 16,631


REFINING: MAIN INVESTMENT PROJECTS 2009-2012 (2/2)

Investment(mmusd)

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205Class V: +50/-30%

10

• Supply ethane in Southeast Mexico for processing ethylene derivatives

• Supply pipelines for ethane: Cd.Pemex–Nvo.Pemex (70 km) and Nvo.Pemex–Cactus-Coatzacoalcos (140 km)

ETHYLENE XXI AND COMPLEMENTARY

PROJECTS


POZA RICACRYOGENIC PLANT

• Develop capacity to process sweet, wet gas from Chicontepec Project

• Build one cryogenic plant (200 mmcf/d) and two LPG storage spheres (20 mb)

56 228Class IV: +35/-20%

COMPRESSION STATIONS: NORTH

• Increase natural gas transport capacity in Northern Mexico (110 mmcf/d)

• Upgrade Sta. Catarina station (overhaul of two 7,400 h.p. turbo-compressors) and build Cabrito station (two 7,400 h.p. turbo-compressors)

12 27Class V: +50/-30%

COMPRESSION STATIONS:

VALTIERRILLA –LÁZARO CÁRDENAS

• Increase natural gas transport capacity for Valtierrilla -Lázaro Cárdenas pipeline

• Upgrade Valtierrilla station (two 4,700 h.p. turbo-compressors) and build Zirahuen station (two 4,700 h.p. turbo-compressors)

3 34Class V: +50/-30%

TOTAL 81 494


GAS & BASIC PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012 (1/2)

Investment is focused on increasing process and transport capacityInvestment

(mmusd)

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400-500Class IV: +35/-20%

• Increase efficiency and lower electric generation costs

• Build a co-generation plant with 300 MW and 550 t/h steam capacity

Co-generationNvo. Pemex

PROJECT GOAL / REACH 2009-2012

Pipeline: Tamazunchale –

San Luis de la Paz –San José Iturbide

• Alternate transport route to Central Mexico that increases transportcapacity (400 mmcf/d) and feeds new electricity plants

• Build the Tamazunchale - San Luis de la Paz (230 km) and San Luis de la Paz - San José Iturbide (56 km) pipelines

1,976 Class V: +50/-30%

Pipeline: Cd. Juarez -Chihuahua

• Meet demand growth and open supply alternatives in Northern border

• Buil the San Isidro–Gloria a Dios (22 km) and Gloria a Dios – El Encino (350 km) pipelines

Pipeline: Punta de Piedra -Poza Rica–Sta. Ana

• Alternate transport route to Central Mexico that increases transportcapacity (400 mmcf/d) and feeds new electricity plants

• Build two new pipelines (245 & 55 km) originating at Poza Rica gas plant

TOTAL 2,376 – 2,476


GAS & BASIC PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012 (2/2)

Additionally, these projects are being promoted through third-party service contracts:

Investment(mmusd)

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224Class IV: +35/-20%

41

• Increase production capacity at Morelos processing center andenhance competitiveness by using latest technology

• Increase capacity from 225 to 360 thousand tonnes / year; modernize existing plant

EthyleneOxyde

(Morelos)


Aromatics(Cangrejera)

• Increase paraxylene production capacity from 240 to 488 thousand tonnes / year, using less inputs and obtainingproducts with more value-added

• Build three new plants and modernize existing plants

63 504 Class III: +25/-15%

TOTAL 104 728

PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012

Investment is focused on modernizing existing plants and increasing capacity in profitable product segments

Investment(mmusd)


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Implemented actions

To face the international financial crisis and its effects on the Mexican economy, President Felipe Calderón announced two programs that constitute anticyclical actions to boost the Mexican economy.

With those programs as reference, Pemex has adopted several actions in order to accelerate and anticipate the company’s programmed expenditure for 2009 (procurement and construction). Some of these actions are:

Launch most of the public biddings during the first quarter of 2009

Accelerate the public bidding processes

Accelerate the formalization of all contracts

Accelerate the maintenance calendar

Accelerate payments to Pemex suppliers

Increase credit terms to Pemex’s clients

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